When creating a character, you should define three short-term goals (e.g, earn enough money to buy that fancy hat, slay the bear eating Uncle Grumpus’ prize goats) for your character and one long-term goal (e.g. find and kill the man who murdered my father, recover the artifact sword from the ancient treasure vault of the Sorcerer King).
As a rule of thumb, short-term goals are things that can be achieved in a game session or three, while long-term goals should take weeks or months of actual play to achieve. Goals should be about what you, as a player, want out of the game for your character, signaling such to the referee. The referee should do their best to work these goals into the campaign.
Instead of characters leveling by gaining experience points (XP) as explained at length in Rule Book One, characters created using these house rules level when they achieve their goals as defined in character creation (see Character Goals on page four of this document). When a character achieves three of their short-term goals, they gain a level. Likewise, when one long-term goal is achieved, a character gains a level.
Whenever a character achieves a short-term goal, their player needs to define a new short-term goal to take its place. Similarly, when a character achieves a long-term goal, their player needs to define a new long-term goal to take its place.
This gamer myth is probably originating in the fact that most XPs came from treasure (1 gp = 1 xp) in B/X and AD&D. Maybe by a wide margin.
One reason that early modules had lots of treasure.
I do the same thing in my OSE/WWN hybrid. Because it’s still focused on specified objectives, goal-oriented XP feels like a natural evolution of XP for gold, but instead of presuming they’re all about delving for treasure, it let lets the PCs define their own ones.What Egon said. It's part of why I use goal-oriented leveling instead of XP when playing OD&D. The relevant text from Front Range Warlock: